Aytu BioScience (AYTU) Stock’s Perfect Trifecta: Natesto®, MiOXSYS®, And Now Fiera®

For the superstitious, things tend to happen in three’s. And, while an investment thesis should not necessarily get predicated on such an event, for those watching the growth of Aytu BioScience (NasdaqCM: AYTU), the phenomenon may again be proving itself to be more than just an anomaly.

Investors are already pleased with the record-breaking growth of Natesto®, the company’s marketed FDA-approved product indicated for testosterone replacement. They are also cheering on MiOXSYS®, AYTU’s rapid semen analysis system that is gaining popularity as the emerging standard of care diagnostic system to assess male infertility caused by oxidative stress. But alas, for those that seek solace in knowing that GOOD things tend to “happen in three’s,” AYTU will not disappoint.

Meet Fiera®, AYTU’s novel sexual wellness device targeting the female side of the multi-billion dollar sexual dysfunction (SD) market. And, for AYTU, this unique product adds a third lynchpin to the company’s growing arsenal of revolutionary pipeline products.

Fiera®’s Proven Effectiveness

Already available on the market, Fiera® is clinically proven to promote sexual desire and arousal for women by providing both gentle suction and light stimulation. Leaving behind the need for costly drugs with the potential for severe and known side effects, Fiera® offers an external, hands-free solution that provides an alternative and practical answer to help overcome issues related to decreased female sexual desire.

Initially developed by Nuelle, and subsequently acquired by AYTU in an all-stock transaction, Fiera® is the culmination of a collaborative effort made by engineers and sexual wellness professionals. The joint effort focused on developing an over-the-counter, drug-free solution for women, thus facilitating a means to generate results for women similar to how Viagra® works for men by increasing blood flow to the genitals. And, they were successful.

Both discreet and effective, Fiera® works by providing gentle suction and mild stimulation delivered in a manner that enhances a women’s blood flow to the genitals, increases natural lubrication and is shown to improve the overall readiness for sexual intimacy. The reception to Fiera® is overwhelmingly positive.

In a scientifically-based study of women aged 25-75 that are both pre and post-menopausal, 97% of the participants reported feeling more sexually aroused and 93% said that Fiera® helped them to generate more interest for sexual intimacy. Importantly, a sizable portion of the study group, roughly 87%, reported feeling as prepared and ready for sex as their partner, with a resounding 96% of them also stating that the device has once again made them look forward to and excited about sexual intimacy and intercourse. Of prime importance, though, the study results further demonstrate that the benefits from Fiera® are achieved in an average of only five minutes, highlighted again by the fact that Fiera® offers a drug-free alternative to currently available treatments. Furthermore, the device can be discreetly purchased either online or through a doctor’s office without a prescription.

The Multi-Billion Dollar Female Sexual Dysfunction Market

Proving itself as both effective and easy to use, AYTU is positioning Fiera® to reap the rewards from an estimated $10 billion developing sexual wellness industry. With clinical data validating that Fiera® is effective, and perhaps better than many prescription based alternatives, AYTU is implementing an aggressive strategy to penetrate new and existing markets designed to increase market share and capitalize on the industry’s hunger to acquire products to address women’s sexual wellness. Hologic, for instance, recently purchased Cynosure (NasdaqGS: CYNO) in a deal that is expected to bring over $1.65 billion in value to Cynosure shareholders. For their part, Valeant (NYSE: VRX) paid approximately $1 billion for Sprout’s Addyi®, often referred to as the “female Viagra®” in a deal that sought to develop the drug into a multi-billion dollar franchise. And, while the troubled VRX recently announced that they are giving Addyi® back to its original owner, citing women’s reluctance to take a drug-induced solution, the terms of the original deal support the intensity of interest for stamping a competitive footprint inside of this developing market. Not only that, the fact that women are hesitant to use drugs to address their sexual issues further supports the place and role of Fiera®.

Keenly aware of how the female sexual wellness market is developing, AYTU is gearing up sales and marketing efforts to exploit the weaknesses of currently available products and to follow a marketing strategy that is generating product adoption and placement success for Natesto® and MiOXSYS®, respectively.

Capitalizing On Fiera®’s Benefits

Positioned as the third revenue-generating component of AYTU’s developing commercial product pipeline, Fiera® is taking it’s clinically proven, expertly crafted personal care device to market in a big way. Capitalizing on the sleek, drug-free, and unobtrusive design of Fiera®, AYTU is on task to educate the market of the benefits from its clinically proven drug-free method for delivering a fast-acting sexual desire solution to women. Now that the market is aware of users’ resistance to taking drugs like Addyi®, AYTU is stepping up its campaign to take advantage of a market population that is wary of options that provide mediocre results that often bring with it severe physical and emotional side effects.

For Fiera®, perhaps the only thing that has held back it’s market success is the lack of aggressive inclusion in the AYTU development plan. But, now flush with cash that is expected to bring the company toward break-even or EPS levels within the next eighteen months, AYTU is gearing up to maximize the value of this potentially lucrative asset. Management is not only expected to promote the benefit of Fiera® as being safe, useful and appealing to women, but investors can expect that AYTU will fund a strategy to educate users about the safety, speed, and drug-free attributes of Fiera® to exploit the substantial and growing market opportunity.

For investors, knowing that AYTU has less than five million shares outstanding, and a cash balance of roughly $7 million, the impact that a successful Fiera® campaign can bring is substantial. Factoring in the history that both Hologic and Valeant paid more than a billion dollars to play in this market provides a confident nod of approval as well. And, if Fiera® continues to validate its position as a viable and effective alternative solution for women plagued by sexual issues, Fiera® may prove its value to shareholders many times over. Hence, if AYTU stays the course in marketing its pipeline correctly, they may ultimately generate substantial returns in three distinct market segments, bringing shareholders a trifecta ticket of diversified success.

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